Guyana has won the first round; the championship rounds lie ahead

Aug 02, 2026 Features / Columnists, Peeping Tom

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(Kaieteur News) – There was a time when the PPP/C would have greeted an IMF report and certainly its familiar neo-liberal prescriptions with suspicion and caution. These prescriptions embodied fiscal austerity, restraint in public spending, privatization and market liberalization.

How times change. Today, an IMF report showering praise on Guyana’s economic performance can be expected to be received almost as an official certificate of good housekeeping. And, on the surface, the latest assessment provides plenty of material for such celebration.

The numbers are spectacular. Real GDP grew by more than 19 percent in 2025, following average growth of almost 40 percent in 2023–24. Oil production exceeded 900,000 barrels per day by the end of 2025. Even more encouragingly, the non-oil economy grew by about 14 percent. Unemployment fell to 6.2 percent, while average inflation remained relatively contained at 3.3 percent.

But an IMF report should not be read merely for its compliments. Its real value often lies in the qualifications, warnings and recommendations tucked beneath the diplomatic language. And when one reads this report that way, a rather different picture emerges.

The first elephant in the room is oil. Guyana’s extraordinary growth is still overwhelmingly connected to the expansion of petroleum production. The IMF projects continued increases as new fields come on stream, with larger oil revenues eventually flowing into the Natural Resource Fund as operators complete cost recovery.

That is good news, but it is also a warning. Guyana’s economic transformation remains profoundly dependent upon an exhaustible resource. The IMF itself acknowledges that higher oil prices could intensify overheating pressures and cause real exchange-rate appreciation.

In other words, the very thing producing today’s abundance can create the conditions that make other sectors less competitive tomorrow. This is the classic resource-curse dilemma, even if the report does not employ that dramatic phrase.

The second concern is the quality and composition of growth. The IMF celebrates the non-oil economy’s 14 percent expansion, but construction remains its largest driver. If construction is being propelled substantially by massive public expenditure, the real test is what happens when the extraordinary public investment cycle slows.

The IMF therefore repeatedly stresses “productivity-enhancing” expenditure. This is diplomatic IMF language for saying that the money is producing durable economic capacity.

The report also quietly raises a red flag over the fiscal position. The overall deficit narrowed to 5.5 percent of GDP, but the non-oil primary deficit was equivalent to one-third of non-oil GDP.

It means that beneath the comfortable oil-funded fiscal position lies a non-oil economy whose government spending and revenue relationship remains deeply imbalanced. Oil revenues are therefore helping sustain a fiscal structure that would look considerably less comfortable if petroleum revenues disappeared.

The IMF notes that strong foreign exchange demand particularly from private investment with heavy import content has kept the market tight.  Saying that the market is tight, simplifies the difficulties importers face in obtaining foreign currency and the high cost of foreign exchange.

What this also suggests is that while investment is booming, but much of that investment requires imports without an equally impressive expansion of domestic productive capacity.

The IMF recommends that broad price-mitigating measures eventually be phased out because they can weaken price signals and should be better targeted. That is essentially an argument for moving away from universal subsidies towards more targeted assistance. This could lead to an increase in the cost of electricity and water.

The report also raises eyebrows about old grouses such as public enterprises, procurement and expenditure oversight. It calls for stronger monitoring of spending outcomes and greater oversight of public enterprises. It urges continued strengthening of procurement practices and consistent compliance with the procurement framework. These are warnings.

The IMF highlights the need to resolve outstanding cost-oil audits, strengthen audit capacity in the oil and gas sector, improve the timeliness of financial accounts of public enterprises and agencies, enhance beneficial-ownership transparency and strengthen enforcement of asset-declaration requirements.

More indicting is what the IMF says about official statistics. The IMF calls for regular labour-force surveys and a new household budget survey. Since APNU+AFC departed, reports of the labour-force surveys have been virtually absent from the website of the Bureau of Statistics.

This begs the question about how can a country properly determine whether its extraordinary growth is improving living standards, reducing inequality or transforming the productive structure if its statistical systems are themselves still lagging behind economic transformation?

And then there is the housing market. The IMF specifically says rapid housing-market growth warrants monitoring and recommends developing a real-estate price index. It also wants better data on corporate and household balance sheets and stronger cybersecurity standards. These are the sorts of recommendations that do not make political headlines, but they tell us where the technocrats believe vulnerabilities could emerge.

The report’s central message, therefore, is more nuanced than the government’s anticipated celebratory reading may suggest.

Yes, Guyana is growing spectacularly. Yes, the fiscal and external positions have improved. Yes, debt distress is assessed as low. Yes, the banking system is well capitalised. And yes, the outlook is highly favourable.

But underneath those achievements are questions about dependence on oil, the sustainability of public spending, the productivity of investment, the strength of domestic production, foreign-exchange pressures, subsidies, public enterprises, procurement, data quality and the ability of the state to manage unprecedented petroleum wealth.

The IMF is essentially saying that Guyana has won the first round. The harder rounds are ahead.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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• championship rounds, IMF report, PPP/C

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